Energy Exchange

Clean Energy And The 2013 Budget Proposal

By Marita Mirzatuny / Published: February 15, 2012

Source: EcoWatch

In his State of the Union Address last month, President Obama made energy issues a focal point. Taking a clear stance, he said that it was time to “end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising.” With this statement, President Obama is addressing the reality that government support for new energy sources is the lowest it has been in any point in U.S. history, according to a report by DBL investors. “During the early years of what would become the U.S. oil and gas industries, federal subsidies for producers averaged half a percent of the federal budget. By contrast, the current support for renewables is barely a fifth that size, just one tenth of one percent of federal spending.”

Going further in addressing climate change the President said, “I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing. Even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.”

On Monday he unveiled his budget proposal for FY 2013. So, how does it hold up to the goals of his speech with regards to a clean energy future?

The Good News:

– The world’s largest energy consumer, the Department of Defense (DOD), would receive approximately $1 billion for energy conservation efforts. This would further the DOD’s increasing commitment to renewable energy which now makes up 8.5 percent of its energy production and procurement.

– With a 3.2 percent increase from the year before, the budget proposes $27.2 billion for the Department of Energy. Of that:

Research and development for energy efficiency, advanced vehicles and biofuels would get $2.3 billion
Renewable energy sources will get a $522 million increase and an additional $174 million for a revamped industrial technology-advanced manufacturing program.
$12 million would be directed towards multi-year research investments in safer natural gas infrastructure in order to reduce risks associated with hydraulic fracturing in shale formations.
Furthermore, pipeline safety would receive a 70 percent, $64 million, increase.
This 3.2 percent increase comes just as a report vindicates the DOE loan program, confirming that the “overall loan portfolio as a whole is expected to perform well and holds less than the amount of risk envisioned by Congress when they designed and funded the program.” Energy Secretary Steven Chu states that, “we have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed. But the vast majority of companies are expected to pay the loans back in full, on time and with about $8 billion in interest — while supporting a total of 60,000 American jobs and helping us compete for a rapidly growing global industry.”

The Bad News:

– Seeming to cave to current attacks, the fiscal 2013 budget proposes stifling cuts to the Environmental Protection Agency (EPA):

Reducing current agency funding levels by $105 million, the EPA is slated to receive $8.3 billion. This would make for the first time since 1994 that the agency’s budget was cut for three consecutive years.

– Counterproductive cuts to USDA’s Natural Resources Conservation Service:

Proposed cuts for Farm Bill conservation programs would be about $600 million.
Already Congress has cut conservation funding by $2.8 billion over the last five years, representing 81 percent of the nearly $3.5 billion in Farm Bill spending cuts over that time period(FY 2008-2012).

Despite some disappointment, overall we at EDF are pleased that the President chose to not only speak to the importance of a clean energy future but that his budget reflects this as well.

Elgie Holstein, our senior director for strategic planning here at EDF and a former associate director of the Office of Management and Budget for Natural Resources, Energy and Science, sums it up well, “despite some flaws, the president’s budget is a big net plus for the environment, and we urge Congress to embrace the positive aspects of it.” That latter part will be the true challenge.

Vice president of EDF’s Energy Program, Jim Marston continues: “The fact is: clean energy and responsible environmental policy make good economic policy as well because they create jobs, while cutting energy and medical bills for American families. Look at it this way: environmental conservation is cheaper than environmental cleanup, just like preventive medicine is cheaper than emergency room treatment. We applaud the President’s support of job-creating, clean energy programs.”

The President understands that getting our energy future on the right path is an essential foundation that our country needs to be competitive, provide jobs and protect our health and environment.

Also posted in Climate, Energy Efficiency, Natural Gas, Renewable Energy / Read 2 Responses

State Of The Union Address: A Mixed Bag On Natural Gas

By Mark Brownstein / Published: January 25, 2012

In President Obama’s State of the Union address last night, he laid out his plans for the expanded role that natural gas will play in the future. The President stated:

“We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use.”

I am pleased to see a commitment to the full disclosure of hydraulic fracturing chemicals, but this is only the first step in getting the rules right for natural gas. As we discussed back in November, EDF President Fred Krupp sat on the Shale Gas Subcommittee of the Secretary of Energy Advisory Board (Subcommittee), which provided strong recommendations for strengthening environmental management in the shale gas industry and developing this abundant energy source in ways that safeguard public health and the environment.

I would have liked to have seen the President speak directly to implementing the Subcommittee’s recommendations, beginning with the Department of the Interior (DOI). Simply committing to the disclosure of hydraulic fracturing chemicals isn’t enough. The recommendations included strict requirements for everything from well construction and the reduction or elimination of methane venting to groundwater protection to methane leakage and emissions flares, among others. These recommendations are ready to be implemented, and DOI has an opportunity to demonstrate best practice in its leasing and oversight of unconventional natural gas development on federal lands.

The jury is out on whether states will embrace the Subcommittee’s recommendations and it will take a concerted effort on the part of organizations like EDF and concerned citizens to demand swift action to improve the quality and effectiveness of state regulations. Implementation of the Subcommittee’s recommendations at the state level is a good place to start and some states are beginning to take a lead role. For example, on the issue of disclosure, Colorado recently set the bar for requiring the full disclosure of all chemicals used in hydraulic fracturing by making this information available on a searchable database. On the other hand, states like New York have proposed weaker requirements, asking companies to disclose only half of the proposed additive products instead of the chemicals actually used in the hydraulic fracturing treatment. For these reasons, it is crucial that the DOI disclosure requirements set a leading example that will influence states to do better. The DOI should start with Colorado, but can do even better.

Last night, the President demonstrated his commitment to domestic energy production through natural gas development and said that “America will develop this resource without putting the health and safety of our citizens at risk.” The federal government and the states have a shared responsibility to ensure that our air, land and water are safe wherever hydraulically fractured wells are drilled.

Also posted in Natural Gas / Comments are closed

Making Do Under TSCA: EPA To Require Reporting Of Health Data By Makers Of Chemicals Used In Hydraulic Fracturing

By EDF Blogs / Published: December 9, 2011

This commentary was originally posted by Richard Denison, Ph.D., Senior Scientist, on the EDF Chemicals & Nanomaterials Blog.

Last August, Earthjustice, Environmental Defense Fund (EDF) and over one hundred other groups recently filed a petition under the Toxic Substances Control Act (TSCA) calling on the Environmental Protection Agency (EPA) to require manufacturers and processors of chemicals used in oil and gas exploration and production (E&P chemicals) – including those used in hydraulic fracturing fluids – both to conduct testing and submit to EPA health and environmental data they already have on hand. The aim of the petition was to ensure EPA obtains better information on the identity, production, use and health/environmental effects of these chemicals in order to evaluate their health and environmental risks. Late last month, EPA announced its decision.

EPA Decision on the Petition

In November, EPA partially granted the petition. It granted the petitioners’ request that EPA develop rules requiring makers of chemicals used in hydraulic fracturing fluids to submit existing information to EPA identifying the chemicals, their intended uses, quantities produced and health or environmental exposure to or effects of the chemicals.

While this is a positive step forward, EPA denied two other aspects of our petition. EPA rejected the request to issue a rule requiring testing of these chemicals to fill data gaps because the agency lacks sufficient information to make the potential risk or high-exposure findings it is required to make under TSCA to justify a test rule. (The high evidentiary burden EPA must meet to require testing is of course a serious limitation of TSCA and a major reason why TSCA reform is so badly needed.) It also limited the scope of the reporting rules only to chemicals used in hydraulic fracturing, and did not include other E&P chemicals, such as those used in drilling muds, or fluids.

An Important Clarification

It is important to note that the actions called for under the TSCA petition are different from the disclosure efforts EDF and others have been pushing for on a state-by-state basis, in three respects. First, the reporting rules will apply to manufacturers and processors of the chemicals themselves, whereas the disclosure initiatives focus on oil and gas drillers to publically disclose chemicals they add to hydraulic fracturing fluid. Second, the EPA rules are intended to provide EPA with information sufficient to understand the potential risks of the subject chemicals at an aggregate, national level, whereas the disclosure initiatives are aimed at a local, even well-by-well scale. Third, the EPA rules encompass information beyond just the identity of the subject chemicals to include other information about their production, use and potential health/environmental effects. While much of the information reported to EPA under the rules can and should be made public, increasing disclosure per se is not the primary focus of our petition nor of the rules.

Next Steps

EPA’s decision is in sum welcome as an advancement of efforts to identify and reduce environmental and public health impacts from oil and gas exploration and production. EPA plans to solicit input on the design and scope of reporting requirements as well as the process by which information is “aggregated and disclosed to maximize transparency and public understanding.” Through these processes, EDF, Earthjustice and other petitioners can argue for EPA to make enhancements “to ensure that the health and environmental risks posed by E&P chemicals are fully understood,” as we stated in the TSCA petition.

Also posted in Natural Gas / Comments are closed

$4 Billion Of Private Investment In Energy Efficiency Projects Announced Today

By Brad Copithorne / Published: December 2, 2011

Source: Shutterstock

In an era of fiscal austerity, government’s options to create change are frequently limited. The Obama administration did not let this roadblock slow them down today when they announced $4 billion of private sector investment in energy efficiency projects as part of their Better Buildings Challenge. This builds on a $500 million financing commitment made in June by Abundant Power, Citi, Green Campus Partners, Metrus Energy, Renewable Funding and Transcend Equity. The Clinton Global Initiative also played a key role in corralling these commitments.

Half of the $4 billion of investment will be in federal buildings using performance contracts. Under the standard terms of a performance contract, an energy services company (“ESCO”) designs and executes an energy efficiency upgrade for a building. The ESCO then provides a guarantee that this upgrade will reduce energy consumption by a certain amount per year and the building owner signs a long-term lease for the project where the annual lease payments are less than or equal to the guaranteed savings. At the end of the lease, the building owner gets all of the future savings. This is a win-win-win solution for taxpayers, our economy and the environment.

The remaining $2 billion commitment is divided between the six financial firms from the June announcement as well as several new participants. These firms are using a wide variety of innovative financial techniques to infuse capital into attractive projects (I highly recommend reading the full White House press release). EDF is working closely with many of these firms to develop new innovations and we’ve been very impressed with the talent, energy and financial commitment currently focused on this issue.

Also posted in Energy Efficiency / Read 1 Response

EDF Supports The SAVE Act

By Kate Zerrenner / Published: December 1, 2011

The SAVE (Sensible Accounting to Value Energy) Act is a reasonable, cost-effective approach to improving mortgage lending and promoting energy efficiency. The act would instruct federal loan agencies to assess a borrower’s expected energy costs when financing a house, which will enable better, more transparent mortgage underwriting, reduce homeowners’ utility bills and hopefully prompt the creation of new jobs in the housing industry.

The Bill Explained

For too long, lack of information about a household’s energy use has resulted in many homeowners miscalculating the true cost of living. The cost of living in a house should be viewed not just as the mortgage or rent payment, but that specific payment plus the utility costs. When homeowners are given a true sense of what utility costs amount to for a particular home, and are armed with the knowledge of what energy actually costs, they will be better able to take control to reduce costs. Not only will homeowners be able to save money, but their actions will also result in environmental benefits such as reducing stress on the electric grid, and therefore harmful greenhouse gas emissions, and improving energy security.

EDF In Full Support

EDF is in full support of this legislation because the information available due to the passage of this bill would make mortgage lending more transparent and actually more accurate since it would depict the true cost of living. On top of these benefits, this bill would reduce America’s energy dependence and thus promote economic growth in the construction and manufacturing sectors.

For more information, please see the SAVE Act fact sheet.

Also posted in Energy Efficiency / Comments are closed

Freight Sustainability Future Depends On Strong EPA SmartWay Program

By EDF Blogs / Published: November 22, 2011

This commentary was originally posted on the EDF Business Blog by Jason Mathers, EDF’s Corporate Partnerships Project Manager.

Source: EPA SmartWay

On the train back north from the U. S. Freight Sustainability Summit this past Friday, two thoughts kept circling around in my mind:

First, the U. S. EPA SmartWay program has created a powerful coalition working on freight sustainability, and its efforts have produced significant benefits for the environment, economy and energy security.
Second, the gulf in scale of action between where we are today and where we need to be is enormous.

Environmental Defense Fund (EDF), the American Trucking Associations (ATA) and the Retail Industry Leaders Association (RILA) co-hosted the freight summit.

Since its inception, EPA SmartWay has injected $6.1 billion dollars into the U. S. economy by reducing fuel consumption from the nation’s freight system– producing a heck of a return for the small investment that taxpayers have made into this program. In the process, it has cut over 16 million metric tons of carbon pollution. It’s a great start.

However, 16 million metric tons is a small percentage of the overall emissions attributed to the freight sector – over half-a-billion metric tons a year in the U. S. alone. And, as we heard again and again at the Freight Sustainability Summit, demand for goods movement is expected to grow significantly over the coming years. So, we simply need to do more.

There were many reasons for optimism at the summit. Top among these is the collective focus of industry, advocacy groups and government agencies on working collaboratively to further this effort. There is universal recognition that we must radically increase the efficiency of freight movement in order to meet the challenge of increasing levels of freight demand while still facing a tighter fuel market, an aging and overextend infrastructure and an environmental mandate to cut carbon.

We also heard scores of success stories from some of the largest and most sophisticated companies in the world. Lowes has reduced a million tons of carbon already from its fleet. Conway told the group how it cut fuel consumption by six million gallons simply by reducing the top speed for its trucks (now 62mph for less-than-truck load and 65mph for truckload applications). Swift shared some impressive results from its pilot of a new aerodynamic fairing that is bolted on underneath a trailer. Michelin told us about real-world studies demonstrating a 9% improvement in fuel economy for tractor-trailer combinations that use new generation wide base tires. My personal favorite was from Home Depot, which was able to cut its domestic supply chain freight emission by 13% in one year – largely from operational improvements.

It’s not just the Fortune 500 group of companies that are acting. Smaller companies shared their stories too. Vic LaRosa, the president of Total Transportation Services, spoke about how his company is helping reduce air pollution around some of the nation’s busiest ports by leveraging alternative fuels and advance vehicle technologies. Several speakers mentioned how small firms and owner-operators will benefit from increases in truck fuel efficiency.

These stories and other sparked by the leadership of the EPA SmartWay program make very good business sense too. Walmart alone has cut its fuel costs by half-a-billion dollars a year since 2005 from improved logistics.

Clearly, progress is being made and more – much more – is possible.

Consider for a second that—based on the SmartWay data points of $6.1 billion saved and 16 million metric tons carbon reduced – the average cost of a ton of carbon reduced under this program is negative $381. That is every ton reduced was accompanied by a nearly $400 dollar savings for the company. We’re not dealing with the low-hanging fruit of cutting freight emissions. We are largely dealing with the apples already on the ground.

Given these massive cost savings still available and the fact that the best science tells us that we need to cut our emissions on the order of 80% over the next 40 years, it is imperative to move freight sustainability well beyond 16 million metric tons that the program has achieved over seven years in fact, we need five to six times these reductions each year going forward.

How do we do this?

First and foremost, we need the EPA SmartWay to remain a strong program. Given its track record of financial returns for society and the urgency of the freight sustainability challenges we face, the program, frankly, should be greatly expanded. SmartWay provides incredibly useful forums for sharing lessons learned. This new generation of tools are performance-based; they enable shippers to track and manage their emissions footprint, while giving carriers a platform where they can compete on environmental performance. Companies that use the services of this vital program should make sure policymakers understand the value it provides.

Next, shippers – the companies that consumer goods movement services – need to step up to the plate and join the program in much larger numbers. As they are the primary customers in the freight economy, shippers play a critical role in rewarding superior environmental performance of carriers. If your company purchases goods movement services and you are not sure if it is a member of SmartWay, you can check here. If it turns out that your company has been on the sidelines of this effort, you can join SmartWay here.

We all need to redouble effort to share lessons learned. As Randy Mullet if Conway noted, like safety and security, companies should freely share their advancements on sustainability. The journey is too long and the challenge too steep for all of us to have to figure out the answers individually

Finally, the freight community needs to aim higher. Significant progress has been made over the last seven years of the SmartWay program. The buy-in from diverse stakeholders, case studies from partners and new generation of tools has created a foundation upon which we all need to build a new freight future; one that measures success against an ever larger scale.

Posted in Washington, DC / Comments are closed